January 11, 2007

If TV is dying, why are people buying large screenTV's?

If television is dying, why are people
• Watching and interacting with programs like American Idol?
• Buying large screen sets as though they were donuts?
• Paying triple digit cable subscription rates?
• Buying DVD’s of entire season episodes for top shows?
• Paying big bucks for rights to transmit TV shows the Internet and Mobile phones?
• Still having Super Bowl and Academy Award parties?
• DVR’ing shows so they don’t miss them?
• So interested in what the Donald, Rosie and Barbara Wawa have to say?
• Add your own thoughts:

Monetizing Media Audiences

How to Make Money from Advertising

Advertising is how we move customers and prospects along the purchase spectrum, from no awareness of our product or service to awareness, preference, intent to purchase, purchase and repurchase.

1. The key to media selling and buying is audience. Without it, advertising is the sound of one hand clapping.

Start your ad sales planning (and pitch) with audience. Who is your audience, how is it measured, what are their characteristics, where do they live, etc. The more you can tell advertisers and media buyers about your audience, in a documentable manner (i.e., measured by a trusted source such as Nielsen), the more likely you are to succeed in the monetization of that audience.

2. Next is the likelihood of the ad being seen and possibly acted upon. This can be measured and dimensioned by such ‘soft’ measures as ‘engagement’ (attentiveness, involvement) or hard measures such as recall.

Most advertising sales are of potential ‘impressions’ or ‘opportunities to see’ rather than proved actual exposures. The closer you can come to being able to ensure an actual and documentable ad exposure, the more valuable the media position.

One extreme in this consideration spectrum is a controlled circulation magazine that is sent free to an audience. This sort of publication must be able to prove real readership or risk being completely discounted by intelligent media buyers.

Another extreme is an ad feature is a live update in a sports event such as an auto race or football game that is highly likely to be viewed by the involved viewing enthusiast.

3. The price of the audience, usually dimensioned in cost per thousand or cost per target rating point, is the next key variable in media buying and selling. The right ad rate for a given media property is determined by a reasonably open marketplace in which media buyers and advertisers can weigh your media offerings vs. others they consider comparable.

All other things being equal, two NFL Football games or two highly rated primetime original TV programs telecast in the same time periods on different TV networks are likely to earn the same ad rates.
But ‘all other things’ are rarely equal in the real world. And many media offerings must compete for consideration with ad positions in completely different media; e.g., internet streaming video vs. network television. In this specific case, my point of view is that an intelligent media buyer and/or advertiser would equate these two offerings because they’re both television, just delivered by different distribution methods.

On the other hand, the buyer would weigh the relative audience size, likely to be higher for the network show; the relative attentiveness, likely to be higher for a TIVO-proof mid-roll in a net video of the same program. It would also be important to define the audiences clearly in terms of desirable characteristics such as age, gender, income, education, purchasing behavior, etc. Even the probable size of the screen would be a factor to consider.

The point is that when all things are not equal, tradeoffs are defined and given relative values in the media consideration process.

4. The program environment is, in my view, the last consideration since if we have an attentive audience that we want to reach and the ad position is well priced, we’ve got what we are aiming for, an effective platform for our ad. What the program environment can add to this is an association ‘rub-off’ for the advertiser and ad. This could be in the form of image, such as an ad in The Kennedy Center Honors or in the MTV Video Awards (depending on the advertiser) or relevance, as an ad in The Academy Awards for a movie or a cosmetic.

The bottom line of ad selling and buying, therefore, is composed of four elements:
1. The audience
2. The quality of the ad exposure
3. The price in terms of delivering audience/exposures for less than comparable media offerings
4. The ad environment as characterized by the programming around the ad and/or the media vehicle itself.

January 8, 2007

My First Time

As an assistant media planner at Ogilvy & Mather in 1966, I was assigned to develop a media plan for Milky Way candy bars. First problem: I’d never written a media plan before. In my first fifteen months in the business, I’d trained in media research and bought Spot TV. Think outside the box; I didn’t even know there was a box.

But O&M at the time was a very friendly place (about $60 million in billings in one office at 49th Street & Fifth Avenue) so I wandered around and picked up some information:

1. Milky Way sales were trending down
2. Corner groceries were being replaced by the new supermarkets
3. Single bar sales at candy stores were declining while multi-packs at supermarkets were growing
4. Hardly anyone bought chocolate bars in the summer because they melted
5. Most candy advertising was directed at children

One other bit of information based on my own personal experience: frozen Milky Way bars were really good.

I put this all together and presented a plan to the account group that included:
1. A recommendation for a summer promotion based on packing six or so Milky Way bars in a free ice cube tray
2. Daytime television during the summer when we could reach kids and their Moms (and virtually no other candies were advertising)

Months later I saw a sales chart that showed a multiyear negative sales trend reversing slightly in the previous summer.

A little ignorance is a wonderful thing.

P.S. O&M gave me six weeks to do this media plan. This was a lot of time even if we did not have electronic calculators, copy machines, faxes, fedex or cellphones much less computers… What a great place to work.